Why are enterprise business partners so important?

All of us have heard the growing importance of partner-touched revenue in the overall portfolio. So much is the buzz that its hard to find someone in SAP who doesn’t remember by heart that we need to get to 40% of SAP’s total revenue to be driven by partners by enterprise business partners2015.

And such a significant portion of our business being driven by partners makes one want to understand, especially when many industries don’t show this phenomenon, fundamentally what are the reasons behind this reality.

So my all conversations with others & my personal thoughts can be summarized in the following 10 reasons why enterprise business partners are probably the most important part of an enterprise software company’s business:

  • Enterprise IT is an Orchestra: Customer needs a lot more that just a software on a disk to really make his or her business run better
  • Limited direct selling capability: Direct sales force can’t reach everyone, we need partners to help us get to people we can’t get to profitably today.
  • Huge portfolio: imagine if Unilever stops selling via retailers and there is a direct sales guy who comes to your house and tries to sell the 2000+ products they have, would be a nightmare. Though it is possible to do so for a Salesman from a Car company such as Toyato with say 20-30 products in its portfolio.
  • Foot in the door: Partner sales teams are a Route to market where your direct sales teams have not been able to get in, this gives an opportunity to let the customer experience the power of your products.
  • Increased innovation: While a company’s own innovation strategy is working its the partners who help it seem even more innovative via building innovations with it or on top of it solutions. Biggest examples being the start-ups innovating on top of HANA platform.
  • Reduced market risk: As a company starts having more partners whose revenues get significantly impacted by its business, its revenue stream will become more stable
  • Human resource development: You are developing a very capable HR base (i.e. the partner employees who are exposed to your Ecosystem) for future hiring without any direct expenses.
  • Free marketing via word of mouth: the more lives a company touches the more people will talk about it and hence build a stronger brand even for its core products.
  • Ego is one thing being smart is another: If anyone is can do something better and cheaper than you, its always smarter to be friends with her than being foes.
  • Use your brand to earn more: If someone can build it but just can’t sell it well, never hesitate to get a new revenue stream by branding it yours. Key is to be responsible about that power the customers have vested in you to help them become better businesses, so you need to help make the right choices for your customers.